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BANK OF AMERICA NATIONAL TRUST AMD SAYINGS ASSOCIATION A. P . G i a n n i n i Chairman o f the Board o f D i r e c t o r s San F r a n c i s c o , C a l i f o r n i a December 11, 1945 Board o f Governors o f the Federal Reserve System, Washington, D. C. Gentlemen: Mr. C a r l F . Wente, Senior Y i c e P r e s i d e n t o f t h i s bank, has been i n correspondence r e c e n t l y w i t h Honorable Henry F . Grady, Chairman o f t h e Board o f D i r e c t o r s o f t h e Federal Reserve Bank o f San F r a n c i s c o , concerning t h e l a t t e r 1 s conduct o f an e l e c t i o n f o r a Class A D i r e c t o r o f the Federal Reserve Bank. The most recent l e t t e r was one from your Board, which was t r a n s m i t t e d t o t h e bank a t your request, and which Mr. Wente has brought t o my a t t e n t i o n . To my u t t e r amazement I f i n d t h a t t h e Board has u t i l i z e d an o f f hand expression i n a personal communication o f mine t o our Washington counsel as c o n f i r m a t i o n o f a view expressed by t h e Board, which deprived Bank o f America N a t i o n a l T r u s t and Savings A s s o c i a t i o n o f i t s l a w f u l r i g h t t o p a r t i c i p a t e i n t h e e l e c t i o n . I should l i k e your Board t o understand f u l l y t h e circumstances i n which I communicated w i t h our Washington counsel. I t i s t r u e , as you s a i d i n your l e t t e r , t h a t Mr. Charles C o l l i n s has appeared on numerous occasions i n b e h a l f o f Bank o f America or Transamerica C o r p o r a t i o n o r b o t h , but i t i s also t r u e t h a t Mr. C o l l i n s has been c a l l e d upon a t v a r i o u s times t o supply i n f o r m a t i o n on t h e i n i t i a t i v e o f members o f your Board. I have always understood t h a t such appearances were proper i n every respect and were f o r t h e purpose o f f a c i l i t a t i n g t h e e x e r c i s e o f t h e Board 1 s s u p e r v i s o r y powers over Bank o f America N a t i o n a l T r u s t and Savings A s s o c i a t i o n o r Transamerica C o r p o r a t i o n o r both i n a manner c o n s i s t e n t w i t h the law and warranted by t h e f a c t s . The Board w i l l r e c a l l t h a t l a s t May i t sent a communication t o Transamerica C o r p o r a t i o n , based upon " r e p o r t s f r o m v a r i o u s sources, w i n which reference was made t o the a c q u i s i t i o n by the C o r p o r a t i o n o f some stock i n C i t i z e n s N a t i o n a l T r u s t and Savings Bank o f Los Angeles. I n r e p l y i n g t o your communication Transamerica had occasion t o r e f e r " i n passing t o some o f the circumstances which accounted f o r i t s t r a n s a c t i o n . Inasmuch as I had r e c e n t l y received i n f o r m a t i o n which s u b s t a n t i a t e d those circumstances and ^ h i c h may w e l l have prompted d i r e c t o r s and stockholders o f t h e C i t i z e n s N a t i o n a l Bank Board o f Governors o f the Federal Reserve System -2- December 11, 1945 t o s o l i c i t the a c q u i s i t i o n by Transamerica C o r p o r a t i o n o f an i n t e r e s t i n t h a t bank, I thought i t proper t o advise a member o f t h e Board i n f o r m a l l y o f such f a c t s . With t h a t i n mind I made the request o f M r . C o l l i n s , who l a t e r i n formed me o f t h e appointment made f o r t h e s p e c i f i c purpose and o f t h e c o r d i a l s p i r i t i n which such i n f o r m a t i o n was r e c e i v e d , w i t h o u t , o f course, any comment f r o m t h e Board member i n r e f e r e n c e t o t h e C i t i z e n s Bank s i t u a t i o n . None was expected. Now, t o my great s u r p r i s e , I f i n d t h a t my reference t o "Transamerica Banks" i n my memorandum t o Mr. C o l l i n s has been d i s t o r t e d i n meaning and seized upon as c o n f i r m a t i o n o f a recent r u l i n g by t h e Board, p r o t e s t e d by t h e Bank concerning the present l e g a l r e l a t i o n s h i p o f Bank o f America w i t h Transamerica C o r p o r a t i o n . T h i s was not d e a l t w i t h i n my memorandum a t a l l . I was conveying t o Mr. C o l l i n s a comparative h i s t o r y o f C i t i z e n s Bank w i t h o t h e r banks, some o f which were operated pursuant t o Transamerica p o l i c i e s and a t l e a s t one o f which had always been independent o f Transamerica 1 s cont r o l , as had t h e C i t i z e n s Bank. T h i s h i s t o r i c a l comparison dated back about f o u r t e e n years and d u r i n g more t h a n h a l f o f t h a t p e r i o d Bank o f America was a s u b s t a n t i a l l y w h o l l y owned s u b s i d i a r y o f Transamerica C o r p o r a t i o n . Everybody knows t h a t . Everybody knows, t o o , t h a t n o t w i t h s t a n d i n g t h e f a c t t h a t more t h a n 140,000 o f t h e Bank's present stockholders own an overwhelming m a j o r i t y o f t h e v o t i n g shares o f Bank o f America and p a r t i c i p a t e a t s t o c k h o l d e r s ' meeti n g s f o r the e l e c t i o n o f d i r e c t o r s , they have found no occasion and have evinced no d e s i r e t o change the management o f Bank o f America. The present management o f the Bank i s t h e management s e l e c t e d by i t s s t o c k h o l d e r s , and 1 f e e l complimented t h a t they have been pleased w i t h the management f o r which Transamerica C o r p o r a t i o n was o r i g i n a l l y r e s p o n s i b l e . I o f f e r no a p o l o g i e s . But I must express t o you my extreme s u r p r i s e t h a t your Board, a c t i n g e i t h e r w i t h o r w i t h o u t l e g a l a d v i c e , would seize upon a handy expression as a l e g a l synonym f o r c o n t r o l . I leave t h e p r o p r i e t i e s t o you. Very t r u l y yours, / s / A. P. G i a n n i n i Chairman o f the Board. P. S. Upon l e a r n i n g o f your communication, I telephoned t o Mr. C o l l i n s and asked him t o g i v e me t h e b e n e f i t o f h i s r e c o l l e c t i o n o f t h e conference w i t h a member o f your Board. I have j u s t r e c e i v e d h i s l e t t e r which i n d i c a t e s t h a t Mr. C o l l i n s f u r n i s h e d t o t h e Board member a t h i s request f o r h i s i n s p e c t i o n a p a r t i a l copy which Mr. C o l l i n s had made o f my memorandum t o him, and t h a t i n t h e b r i e f i n t e r v a l i n which i t was b e i n g inspected by t h e member, Mr. D r e i b e l b i s glanced a t i t and l a u g h l i n g l y commented on t h e i n c l u s i o n o f Bank o f America i n a group o f s o - c a l l e d "Transamerica Banks.* A p p a r e n t l y what M r . D r e i b e l b i s saw was a t y p e w r i t t e n paper, not signed by anybody, and which was never before Board o f Governors o f the Federal Reserve System December 11, 1943 the Board. I might add t h a t Mr. C o l l i n s questioned the p r o p r i e t y o f a q u o t a t i o n by the Board from memory o f a p e r s o n a l communication from me t o him. A.P.G.
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